The Treasurer has announced a series of amendments to the JobKeeper rules:
Extensions on the payment of the first two fortnights
For the first two fortnights (30 March – 12 April, 13 April – 26 April), the ATO will accept the minimum $1,500 payment for each fortnight has been paid by you even if it has been paid late, provided it is paid by 8 May 2020. If you do not pay your staff by this date, you will not be able to claim JobKeeper for the first two fortnights.
There has been no mention of late payments for fortnights in May (i.e. 10 May & 24 May) and subsequent fortnights. Therefore, at this stage, we presume that JobKeeper payments need to be made upfront during an employee's pay cycle.
As JobKeeper reimbursements are in arrears from May, employers should contact this office immediately if they envisage cashflow issues.
New registration deadline
The Tax Commissioner has confirmed that the registration deadline for the April and May JobKeeper payments has been extended to 31 May 2020. While the extra time is very welcome, it will not remove the urgency to determine eligibility for April 2020 JobKeeper payments.
To be eligible for April JobKeeper payments, employers will need to ensure that staff have been paid at least $1,500 for the first two JobKeeper fortnights (30 March – 12 April and 13 April – 26 April) by the above date.
Unless the situation is clear cut, employers should be careful about making top up payments to staff until they have assessed their eligibility and have received the JobKeeper nomination forms back from staff (unless they want to risk being ineligible and not being reimbursed for these top up payments).
Alternative test for service entities
An alternative decline in turnover test will apply to special purpose employment entities such as service entities. In circumstances where an employment entity is utilised within a group of companies, and that employment entity is unable to demonstrate a sufficient decline in its own turnover, the employment entity will be able to refer to the decline in turnover of the operating entities it services. This should allow some special purpose service entities that provide employee labour to group members to access the JobKeeper scheme, although we are still waiting to see the detail of these new rules. See Treasury fact sheet.
The alternative test will refer to the combined GST turnovers of the related group members using the services of the employer entity.
Integrity provisions will allow the Commissioner to prevent access to JobKeeper where there are "material compliance or integrity concerns with an entity's use of the test."
Eligibility changes for 16 & 17 year olds
Full time students who are 17 years or younger and not financially independent have been excluded from receiving JobKeeper payments. This change will apply prospectively so employers who have already paid employees will not be out of pocket. Clients should take this change into account before making further payments to these employees.
'One in, all in' principle strengthened
The controversial 'one in, all in' principle is being strengthened. Where an employer has agreed to be a part of the JobKeeper scheme and the employee has agreed to be nominated, employers cannot select which employees will participate in the scheme. The Treasurer states that this feature of the scheme will be made clearer - although does not specify how.
Changes for charities and religious institutions
- To meet the decline in turnover test, eligible charities will be able to choose to use either their total turnover or turnover excluding government revenue to assess their eligibility for JobKeeper.
- Eligible religious institutions will be able to receive JobKeeper payments for each eligible religious practitioner (ministers of religion or a full-time member of a religious order) for which they are responsible under the tax law.
- Changes will be made to enable entities endorsed under the Overseas Aid Gift Deductibility Scheme or for developed country relief to meet the requirement that not-for-profits "pursue their objectives principally in Australia". Employee eligibility remains subject to the residency requirements.
The full details of these changes are not yet available but we will bring you these as soon as they are released.